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Former AIG Employee Sues Board, PwC Over Audits

Posted on 05 Jan 2011

Claiming that PricewaterhouseCoopers (PwC) was negligent in its audits of American International Group (AIG) and that the insurer's board failed to pursue a claim against the accountants, a former AIG employee has filed a lawsuit, naming the board and PwC as defendants.

The suit, filed in federal court in Manhattan on Tuesday by Wanda Mimms, was brought as a derivative action on behalf of the AIG Incentive Savings Plan.

Mimms alleges that the AIG incentive plan held shares in the company from late February 2008 through late January 2009. PwC, as AIG's auditor, should have known the share price was inflated by inaccurate financial statements, Mimms argues.

Mimms demanded in July 2010 that AIG's investment committee pursue action against PwC for losses in the plan. Her demand was referred to AIG's board, which rejected it in September, according to the lawsuit.

The lawsuit demands PwC make the incentive plan whole for its losses, as well as other relief.

A PwC spokesman said the company has not been served and cannot comment at this time. An AIG spokesman declined to comment.